About Workplace Pensions
A workplace pension is a way of saving for your retirement that's arranged by your employer.
Some workplace pensions are called 'occupational', 'works', 'company' or 'work-based' pensions.
You and / or your employer may already have chosen to pay more than the minimum contributions. If your payments are greater than the increased minimum levels, you may not need to pay any more.
The value of your pension can fall as well as rise and you may not get back the original amount invested.
How your Workplace Pension Works
A percentage of your pay is put into the pension scheme automatically every payday.
In most cases, your employer and the government also add money into the pension scheme for you.
The money is intended to supplement your retirement income when you start getting the pension.
You can usually take some of your workplace pension as a tax-free lump sum when you retire. This reduces your income in retirement, so you should seek advice regarding making this decision.
If the amount of money you have saved is quite small, you may be able to take it all as a lump sum. 25% is tax free but you'll have to pay Income Tax on the rest.
You cannot usually take the money out before you're 55 at the earliest - unless you are seriously ill.
Workplace pensions (Auto Enrolment) and the State Pension
The pension you get from the government is called the State Pension. You get it when you reach your State Pension age.
The money you get from a workplace or other pension could make it much easier for you financially when you are retired.
A pension is a long-term investment, the fund may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
The pensions regulator is the statutory regulator for workplace pensions. Auto Enrolment is not regulated by the Financial Conduct Authority.